Definition of 'Alternative Minimum Tax (AMT)'

The AMT is another method of calculating your tax obligation. It differs from the .normal. way in the way it handles different kinds of income and deductions. It was created to target some high-income individuals who were claiming so many deductions that they ended up paying almost no taxes at all. Whichever amount is higher, the "normal" tax or the AMT, is the one you pay. You can calculate your AMT using Form 6251

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